Crude oil prices were heading for more than a 6% weekly loss amid fears that the epidemic in China would slow its economic growth and world oil demand.
Brent crude was trading at $61.77 per barrel at 1300 GMT on Friday, on a trajectory towards a 6.4% weekly loss, after it opened Monday at $65.98 a barrel. The international benchmark hit as low as $61.25 a barrel on Thursday -- its lowest level since Dec. 4.
American benchmark West Texas Intermediate (WTI) was trading at $55.41 a barrel at the same time, heading for a 6.5% weekly decline, after starting Monday at $59.28 per barrel. WTI fell as low as $54.77 per barrel to mark its lowest level since Nov. 20.
The coronavirus epidemic, which originated in Wuhan, China caused 26 deaths so far but has not yet spread internationally. Nonetheless, it dimmed the outlook for China's economic growth.
"The rapid spread of the virus means there is no longer any doubt that it will disrupt the economy this quarter," Julian Evans-Pritchard, a senior China economist at Capital Economics, said in a note on Friday.
He stressed that passenger traffic has more than tripled since the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003, with a tenfold rise in overseas travel that now makes any containment more challenging.
While Capital Economics were expecting Chinese economic growth to slow from 5.7% in the fourth quarter of 2019 to 5.3% in the first quarter of 2020, "the coronavirus makes a pronounced slowdown even more likely," Evans-Pritchard said.
"If the disease is not brought under control quickly, then even our downbeat forecasts may turn out to be too high. The official GDP figures are likely to show a milder slowdown, as they did during SARS," he said.
If the coronavirus develops and spreads throughout the world through travel and trade lines, demand for oil could fall by 260,000 barrels per day, U.S.-based investment banking firm Goldman Sachs warned earlier this week.
Another major investment giant JPMorgan also cautioned that if the virus develops into a SARS-style epidemic, oil prices could fall by as much as $5 per barrel.
The World Health Organization (WHO) said Wednesday that it is "too early" to declare a global emergency for the coronavirus.
"Make no mistake this is an emergency in China, but it has not yet become a global emergency. It may become one," WHO Director-General Tedros Adhanom Ghebreyesus said in Geneva.
By Ovunc Kutlu